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Renters most in need of Australia’s 13m spare bedrooms

By Juliet Helmke
07 June 2022 | 1 minute read
Nerida Conisbee

Australia may be facing a shortage of homes to accommodate its residents, but a lack of bedrooms isn’t the issue.

The Australian Bureau of Statistics’ (ABS) latest survey of income and housing has revealed that there are roughly 13 million bedrooms classed as “spare” in Australian homes, and by and large, they all lie in owner-occupier dwellings.

“Overall, the majority of spare rooms are in owner-occupied housing – of the total 13 million spare rooms, only 2.6 million are in rental accommodation,” Nerida Conisbee, Ray White’s chief economist noted.

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“This is likely because most people would only rent exactly what they need at the time but also because renters tend to be younger and lower income and would also need to optimise their living space as a result.”

Australia’s tenants, she revealed, are not only more likely to be in homes without excess space, they’re also more likely to be in need of more of it.

“Renters definitely have far fewer spare bedrooms. On average, 3.8 per cent of households needed an extra room, this increased to 7 per cent for people renting with a private landlord. The situation was better for government tenants – only 3.6 per cent needed an extra room,” Ms Conisbee said.

“There are hardly any spare bedrooms in multi-family households, or in homes of single parents,” she added, regardless of whether those families owned or rented.

The challenge facing housing advocates and government officials alike is how to even the balance of space versus occupancy so that more Australians are in houses that suit their lifestyles.

Ms Conisbee acknowledged that “a redistribution of all these people is not realistically an option”, but she did note that certain barriers were deterring those who may be keen to move to a smaller home.

“The majority of spare bedrooms (two thirds) are in households with a couple only, or a single person and most of them own their own homes,” she said. Meaning that some of the impediments for people who could be “rightsizing” are involved in the process of selling.

“A big challenge with getting older people into smaller and presumably cheaper homes is financial. Many downsizers risk losing some of their pension – the family home is exempt from pension assets test but any home equity unlocked by downsizing is not. Paying for stamp duty is likely to be a deterrent. Finally, earnings from the cash released are taxed, whereas capital gains on the home are not,” Ms Conisbee explained.

The downsizer scheme, which was introduced in 2018, alleviated some of these financial hurdles by allowing over-65s to make non-concessional (after-tax) contributions into their super account of up to $300,000 from the sale proceeds of their family home. The Liberal Party had vowed to lower this age cap to 55 had it won the most recent election.

But Ms Conisbee noted that financial concerns weren’t the only factors standing in the way of downsizers.

“Many want to stay in their neighbourhoods and there aren’t suitable smaller homes available to them. This could be addressed through ensuring developing suitable smaller homes in neighbourhoods with a large number of ageing households,” she said.

“What can’t be addressed however is the emotional attachment people have to their homes and the difficulties many face in the disruption that downsizing creates.

“We may have a lot of spare rooms but there certainly is no easy solution in getting them better utilised.”

Renters most in need of Australia’s 13m spare bedrooms
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ABOUT THE AUTHOR


Juliet Helmke

Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.

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